The results are in: Net Metering in California benefits ratepayers!Vote Solar funded consulting firm Crossborder Energy to conduct an in-depth analysis of the costs and benefits of net metering to the ratepayers of the three California IOUs, using a CPUC-approved economic model. The study concludes that net metering’s benefits to the ratepayers of those utilities outweigh the costs: the benefits to ratepayers in SCE, PG&E, and SDG&E territories will total more than $90 million every year by the time the state’s net metering program is fully subscribed at 5% of peak demand.

Net Metering in California and a solar lease is the best way to offset rising electricity costs! Contact Solar Joey 24/7 about getting setup and solar lease financing. Feel free to get started today with a solar energy quote.

Booming rooftop solar installations in California are bringing an unwelcome surprise to the homes and businesses that don’t have the devices: an extra $1.3 billion added to their annual bills.

Power companies in the biggest U.S. solar state are required to buy electricity from home solar generators at the same price they resell it to other customers, meaning utilities earn nothing to cover their fixed costs. The rules are short- sighted because eventually rates must be raised to make up the difference, according to Southern California Edison, which has joined with competitors to estimate potential losses.

As more homes and warehouses get covered in solar panels, higher rates imposed on traditional consumers risk a growing conflict between renewable-energy advocates and power companies that foresee a backlash in California and 42 other states with similar policies. The tension has also emerged in countries including Spain and Germany, where solar investments are curbing investment in the power grid.

“You get into a situation where you have a transmission and distribution system with nobody paying for it,” said Akbar Jazayeri, vice president of regulatory operations at Edison, a unit of Edison International (EIX) and California’s second-largest electric utility.

To deter losses as solar abounds, states typically set a cap on the amount of photovoltaic power utilities must buy under so-called net-metering policies. Those allow a meter to run backward during the hours a day when a home or business is selling the power to the utility. California’s limit is 5 percent of a utility’s aggregate peak load.

California Public Utilities Commission Seal

New Customers

About 20,000 customers of San Diego Gas & Electric had connected 146 megawatts of solar panels to its grid as of Nov. 1, accounting for 1.2 percent of its peak load. The company is adding 409 new net-metering customers a month, said Stephanie Donovan, a spokeswoman for the state’s third-largest utility.

SDG&E currently can’t collect about $18 million to $20 million a year in grid costs from customers with rooftop solar panels, according to Dan Skopec, vice president of regulatory affairs for San Diego-based Sempra Energy (SRE), the utility’s owner.

The utility will be shifting about $200 million in annual costs to customers without panels when the state reaches its cap, Skopec said in an interview. Solar customers “avoid charges, not just for energy, but also the costs of the transmission and distribution system,” he said. “That’s why we say it is not sustainable.”

Passing Costs

Southern California Edison will transfer about $400 million in annual costs to people without solar systems when the state hits the cap, David Song, a spokesman, said in an interview. PG&E Corp. (PCG)’s Pacific Gas & Electric, the state’s biggest utility, will pass on about $700 million a year, according to Denny Boyles, a spokesman, for a total of $1.3 billion from the three utilities.

That’s about 3.9 percent of the $33.5 billion spent on electricity in 2010 in California, based on the latest figures available from the U.S. Energy Department.

“The problem exacerbates with each new system that goes on a roof,” Mark Bachman, an analyst at Boston-based Avian Securities Inc., said in an interview. “Utilities will need to get reimbursed for their grid costs by a shrinking number of consumers.”

California utility customers installed 245 megawatts of solar panels in 2011 and have already added more than 315 megawatts this year, according to the California Solar Initiative, a state program to encourage rooftop energy systems.

Solar Growth

Installations of U.S. residential and commercial solar systems totaled about 1,050 megawatts in the first three quarters of the year, according to the Solar Energy Industries Association, compared with about 1,100 for all of 2011.

SolarCity Corp. (SCTY), which installs and owns rooftop solar systems, has gained 49 percent since its Dec. 12 initial public offering. The San Mateo, California-based company has built solar power systems on more than 45,000 U.S. building, and its home state is its largest market, according to its website.

Growing demand for rooftop solar has been driven, in part, by net metering, said Eran Mahrer, vice president of utility strategy at the Washington-based Solar Electric Power Association.

The policy “has been the most important tool,” he said in an interview. “There’s a lot of debate about what is fair. The caps provide a checkpoint where regulators and utilities can stop and revisit the effects.”

Raising Caps

The growth is also driving efforts to raise net-metering caps. California revised the way it calculates its limit in May, effectively doubling to about 5 gigawatts the amount of solar energy that state utilities will eventually be required purchase.

California utilities oppose efforts to expand net-metering programs. Solar customers, who typically sell power to the grid when the sun is shining and use the income to offset charges for using electricity at night or on cloudy days, “are just using our system as a storage device,” said Jazayeri. “They should pay something for that service.”

So far, regulators haven’t been sympathetic to utilities’ complaints about rooftop solar power. The California Public Utilities Commissionrejected in January San Diego Gas’s request to impose a “network use charge” that would have added a fee to customers with rooftop solar panels.

Easing Stress

And solar developers say rooftop systems actually benefit the power grid by providing power during the hottest parts of the day. That eases stress on wires and transformers and helps utilities defer maintenance and upgrades, said Todd Pedersen, chief executive officer of Blackstone Group LP’s Vivint Inc., which installs residential solar.

“We need an honest cost-benefit analysis of adding distributed solar to the grid,” Pedersen said in an interview in New York. “It’s in everyone’s interest to resolve this now because I see no signs of slowing as solar becomes cheaper than the utilities in most states.”

In New Jersey, the second-largest solar state, utilities had connected 689 megawatts of net-metered solar power to the grid as of Aug. 31, about 3.6 percent of the state’s 19,000 megawatts of peak demand.

That exceeds the state’s 2.5 percent limit, so regulators may now authorize utilities to stop accepting requests for grid connections. They haven’t yet, partly because New Jersey power companies are required to get 4.1 percent of their electricity from sunlight in 2027 and promoting rooftop solar through net- metering programs will help them reach that goal even if it reduces revenue, the agency said in an e-mail.

German Backlash

People in other countries are protesting higher rates stemming from net-metering programs. In Germany, the world’s largest market,Chancellor Angela Merkel is facing a backlash against higher power bills related to renewable energy. Grid fees will boost household bills an average of 10 percent next year, according to industry analyst Verivox.

Permitting net-metering programs to grow indefinitely is “not sustainable,” said California State Assemblyman Steven Bradford, who represents Los Angeles. He wrote legislation that was approved in August requiring the state to conduct a detailed study on the economic impact of rooftop panels before making any additional changes to the cap. He expects the study to show net metering has a negative impact on utilities and customers who don’t have solar systems.

“You can’t purchase wholesale power at retail prices and not affect your bottom line,” Bradford said in an interview. “Utilities are seeing it already.”

He said rooftop solar is becoming a significant burden to both utilities and consumers, especially the poor who can’t install panels. “Additional costs — and we’re talking about $1 billion in the aggregate — will disproportionately hit people on fixed incomes.”

The Public Purpose Programs Charge (PPPC) will increase for all rates, except D-CARE, Area Lighting Street and Highway (LS-1, LS-2, and LS-3), Residential Walkway Lighting (DWL), and Outdoor Area Lighting Service (OL-1).

Rooftop solar power is growing like crazy in California. But there’s a big problem: About 44 percent of California residents are renters, not homeowners. That means that nearly half the residents of the state can’t purchase solar-generated electricity even if they want to.

Now the solar industry, utilities, environmentalists, financiers and legislative staffers in Sacramento are hashing out an innovative but controversial Senate bill that would allow people to join forces and collectively “buy” solar power from a shared facility.

The bill covers other forms of renewable energy, including wind, biomass, geothermal, and small hydropower. But solar panels, which have seen a dramatic drop in price in recent years, are expected to make up the lion’s share of new projects. Senate Bill 843 aims to bring an additional 2 gigawatts of renewable energy online within the territories of the state’s three largest utilities: PG&E, Southern California Edison and San Diego Gas & Electric. Two gigawatts is nothing to sneeze at: One gigawatt is roughly the output of two coal-fired power plants and is enough energy to power 750,000 homes.

The bill would allow customers of the three utilities to “buy” renewable energy from, say, a solar array on the roof of a church, in the field of the local high school or at City Hall.

Customers would sign contracts with the developers of the solar projects and pay a monthly fee for the energy they buy. In exchange, they would become “subscribers” of the project and receive a credit for their portion of the energy produced on their monthly utility bill.

Democrat Lois Wolk, whose 5th Senate District includes the city of Davis, is sponsoring the bill, which is winding its way through the Legislature. The concept is of great interest to Gov. Jerry Brown, who has made expanding access to “distributed generation” solar projects in urban areas a key platform of his energy agenda. The Assembly Appropriations Committee is scheduled to hold a hearing on the bill Aug. 16.

SB 843 (Wolk) Community Based Self Generation Structure

“This is the next step in terms of making solar available to the largest number of people possible, including small businesses who lease their buildings, renters and people who live in apartments,” Wolk said in an interview. “In a collective and cooperative way, it allows people to take advantage of economies of scale.”

But the state’s three large utilities, as well as staff at the California Public Utilities Commission, have expressed reservations about the bill and are suggesting several amendments. One of the chief concerns is that utility customers who don’t participate in the proposed program will effectively be subsidizing those who do because of the additional costs associated with bringing more renewables onto the electric grid.

Utilities are already under enormous pressure to buy 33 percent of their electricity from renewable sources by 2020, but the 2 gigawatts resulting from the bill would not count toward that goal. The three large utilities argue that the proposed program should apply to all utilities in the state, including municipal utilities in cities like Alameda, Palo Alto and Santa Clara. And some warn that the bill is far too complex and would be a nightmare for state regulators to fairly administer.

Southern California Edison is firmly opposed to the bill. San Diego Gas & Electric generally support it but have proposed amendments. PG&E and a legislative committee of the CPUC both oppose the bill unless it is amended. A lot of negotiating is going on.

“PG&E strongly supports renewable energy, as well as additional renewable energy options for our customers,” said David Rubin, director of service analysis at PG&E. “However, our key concern with this bill is that it creates a significant additional procurement obligation — at prices that exceed the value we are getting on behalf of all of our customers.”

Among those actively lobbying on behalf of the bill is California Interfaith Power and Light, a coalition of religious groups responding to global warming through the promotion of energy conservation, energy efficiency and renewable energy. The group has 560 member congregations throughout the state.

“Many members of our congregations want renewable energy because it’s the moral thing to do,” said Rev. Sally Bingham, an Episcopal priest in San Francisco and the organization’s founder. “It would be great to have a huge solar array on a big mega church, and then allow all of the members of the church to access that energy from the sun.”

Tom Price, director of policy for CleanPath Ventures, a San Francisco-based renewable energy fund, has spent months promoting the bill because he wants to broaden access to solar. His interest was sparked when he was renting an apartment in San Francisco but couldn’t install solar panels because his landlord didn’t want them.

“The problem with solar is that you have to be a rich homeowner with excellent credit and a lot of equity in your home,” said Price, who currently rents a home in Berkeley that does not have solar panels. “You also have to have a roof that faces south and isn’t shaded by trees. The vast majority of Californians don’t fall into this category. It’s a monstrous market failure.”

California, where just 55 percent of residents own their homes, has one of the lowest homeownership rates in the country, according to 2011 data from the U.S. Census Bureau. Nationally, the homeownership rate is 66.1 percent.

Even some homeowners have been frustrated by road blocks to solar. David Ginsborg, a deputy to Santa Clara County Assessor Larry Stone, owns a townhouse in a 12-unit complex in the Willow Glen neighborhood of San Jose. Ginsborg serves on the board of his homeowners association and looked into putting solar panels on the roof of the buildings, with the idea that the homeowners association would incur the debt. But solar installers basically told him that it couldn’t be done because of legal and logistical hurdles around metering and billing for a system on a shared roof.

“I was surprised and disappointed,” he said. “Why shouldn’t a homeowners association go solar? If we wanted to pave the street or build a swimming pool, we can incur debt for that. But we can’t go solar. It’s outrageous when you think of it. There are 80,000 condominiums and townhouses in Santa Clara County — that’s 25 percent of all homeowners.”

Southern California Edison territory map for solar rebates

The below map represents the area which qualifies for solar rebates via the California Solar Incentive rebate program for residential applications. Edison has the highest rebate of all the IOU (investor owned utilities) in Southern California.

SCE territory map solar rebates

Please contact Solar Joey to find out how much of the rebate you can take advantage of to midigate the cost of going solar.

About

With ASD the paradigm has been set and all that is left is for consultants to help people understand the benefits of going solar and the value of choosing ASD as their solar providers.